WEBVTT - Is The Stock Market Broken? #521 0:00:00.120 --> 0:00:03.440 Welcome to How the Money. I'm Joel and I am Matt, 0:00:03.600 --> 0:00:07.160 and today we're asking the question is the stock market broken? 0:00:26.880 --> 0:00:29.319 Is the stock market broken? It makes me think of 0:00:29.640 --> 0:00:32.520 like if you've always gone to a certain candy machine. 0:00:32.760 --> 0:00:35.600 So our kids when we go to visit uh Kate's folks, 0:00:36.120 --> 0:00:39.440 the in laws, they've got this Eminem's machine and at 0:00:39.479 --> 0:00:42.280 their house, Yeah, like an old timey like gumball machine 0:00:42.280 --> 0:00:44.839 that they've stuck peanut Eminem's in with a little jar 0:00:44.920 --> 0:00:47.360 of quarters or coins to the side of it. And 0:00:47.400 --> 0:00:48.880 it makes me think that if we went to visit 0:00:48.920 --> 0:00:50.920 them and the girls stuck a coin in there to 0:00:50.960 --> 0:00:53.640 get some of those peanut Eminem's and it didn't work, 0:00:53.760 --> 0:00:57.400 they would say, Hey, this thing's broken. This is I'm 0:00:57.400 --> 0:00:59.320 not getting the treats. I'm not getting the candy like 0:00:59.400 --> 0:01:01.720 I used to. And I think that's how a lot 0:01:01.760 --> 0:01:04.040 of folks have been approaching the stock market. They've they 0:01:04.080 --> 0:01:07.520 sort of seen it as this ultra savings account that 0:01:07.600 --> 0:01:09.479 just only goes up in value, where they've only seen 0:01:09.520 --> 0:01:12.240 their balances grow over time. And that's why we're asking 0:01:12.240 --> 0:01:14.360 this question today because I think there might be some 0:01:14.400 --> 0:01:17.399 folks wondering have things changed, Is it going to be 0:01:17.400 --> 0:01:19.600 different this time? And they want to know what they 0:01:19.640 --> 0:01:22.360 should be doing. That's why we're talking about investing and 0:01:22.360 --> 0:01:25.920 talking about the stock market. Recent returns have not not 0:01:26.040 --> 0:01:29.160 been so good if you are largely exposed to the 0:01:29.160 --> 0:01:33.080 stock market, and future predictions aren't so great either. We're 0:01:33.080 --> 0:01:34.920 going to kind of kind of talk about the stock 0:01:34.959 --> 0:01:37.720 market from both of those perspectives today on the show. 0:01:37.840 --> 0:01:39.639 Before we get to that, Matt, I want to mention 0:01:39.800 --> 0:01:43.440 we we got feedback from a listener, Amanda, who is 0:01:43.480 --> 0:01:46.000 participating in the How the Money Tell Your Stuff challenge, 0:01:46.240 --> 0:01:48.960 which by the way, just updates you. I sold three things, 0:01:49.200 --> 0:01:52.480 uh this past weekend? Got after it? That's all right? 0:01:53.040 --> 0:01:56.600 Were you shamed? Turn on the jets. You shouldn't feel shamed. No, 0:01:56.720 --> 0:01:58.880 I wasn't, but it really I it lit a fire 0:01:58.920 --> 0:02:00.400 to me because it was something that I'd put on 0:02:00.440 --> 0:02:02.320 the back burner. Why we talk about this kind of stuff. 0:02:02.320 --> 0:02:04.120 We talk about money because we want you focusing on 0:02:04.160 --> 0:02:06.639 your money. I got challenged talking about the challenge because 0:02:06.760 --> 0:02:08.160 we want you to be made myself more than a 0:02:08.240 --> 0:02:10.360 hundred bucks on those three items, which is great, And 0:02:10.400 --> 0:02:12.840 it just felt good to clear some things out that 0:02:12.880 --> 0:02:14.520 I've been meaning to clear out that I've been meaning 0:02:14.520 --> 0:02:17.799 to sell. And you know what, seeing people like happy 0:02:18.360 --> 0:02:21.880 to buy that electronic gizmo or gadget for pennies on 0:02:21.919 --> 0:02:24.200 the dollar from what you'd buy it brand new makes 0:02:24.200 --> 0:02:26.760 me happy to would was the electronic device we an 0:02:26.760 --> 0:02:29.720 old iPad, like an iPad generation two that had just 0:02:29.760 --> 0:02:32.120 gotten really slow, but some people really want those. Still 0:02:32.360 --> 0:02:33.320 is going to be able to put that thing? We 0:02:33.520 --> 0:02:35.680 had a chromebook that we were using for virtual school. 0:02:36.560 --> 0:02:39.040 Rome Books are not great. They're kind of slow too, 0:02:39.160 --> 0:02:40.640 but it was one of those things where we had 0:02:40.680 --> 0:02:42.840 bought it during you know, on sale or something to 0:02:42.840 --> 0:02:45.799 to help facilitate virtual school during the pandemic, and now 0:02:45.800 --> 0:02:48.160 we're not using it anymore. I got it from the school. 0:02:49.520 --> 0:02:52.000 We stole it from how to Scratch out of this 0:02:52.080 --> 0:02:55.040 code that was exactly at the top. No, we actually 0:02:55.080 --> 0:02:57.760 got it ourselves. Yeah, well, something worth mentioning to. Amanda 0:02:57.840 --> 0:03:01.240 mentioned going to consignments words to sell some of her stuff. 0:03:02.200 --> 0:03:05.520 That was really cool to mention because personally, I don't 0:03:05.560 --> 0:03:08.560 know what consignment stores are like. I mean, I know 0:03:08.600 --> 0:03:11.680 what they are, I just haven't participated in them myself. 0:03:12.040 --> 0:03:13.720 I know that you can leave things there at the store, 0:03:13.720 --> 0:03:15.639 they take a cut when it comes time to sell 0:03:15.680 --> 0:03:17.639 because they've got the storefront all that kind of thing. 0:03:17.840 --> 0:03:19.120 I don't know. In my mind, it's like this old 0:03:19.120 --> 0:03:22.440 school term. It's like, if you go to consignment shops, 0:03:22.639 --> 0:03:24.880 I bet you also buy stuff on layaway, Like it's 0:03:24.880 --> 0:03:27.519 a part of the same sort of generation generational I 0:03:27.520 --> 0:03:28.799 don't know, I think a shift in my mind. I 0:03:28.840 --> 0:03:31.360 think of consignment stores as people who are more modern 0:03:31.400 --> 0:03:35.080 antique enthusiasts or something like vintage people. And sometimes those 0:03:35.120 --> 0:03:37.880 consignment stores are actually perfect for some of those items 0:03:37.880 --> 0:03:40.520 where you're like, I think this is worth something, but 0:03:40.800 --> 0:03:42.960 I don't know how to go about selling it. I 0:03:43.000 --> 0:03:45.440 don't know how to find the right buyer who's going 0:03:45.480 --> 0:03:47.240 to pay the amount that this thing is worth. And 0:03:47.280 --> 0:03:50.400 so Amanda mentioned consignment shops for for some of those things. 0:03:50.480 --> 0:03:53.080 I think she's got a good point. Because let's say 0:03:53.120 --> 0:03:55.520 I've got a mid century antique and I just post 0:03:55.560 --> 0:03:58.160 it on Facebook yard Sale myself, like I did for 0:03:58.320 --> 0:04:02.120 Facebook Marketplace. I guess right, the chances are I am 0:04:02.120 --> 0:04:04.320 not going to get top dollar. But but let's say 0:04:04.360 --> 0:04:07.240 somebody else with a mid century following on Instagram of 0:04:07.280 --> 0:04:09.800 ten thousand people. Uh, they might be able to take 0:04:09.840 --> 0:04:11.840 that same piece and sell it for twice as much 0:04:11.920 --> 0:04:14.800 as I could, because those the buyers that want that 0:04:14.880 --> 0:04:19.400 kind of stuff are specifically looking at this person's page consistently. 0:04:19.400 --> 0:04:21.200 They know they have good stuff. And so that's kind 0:04:21.240 --> 0:04:22.840 of how I think of consignment source. I think it 0:04:22.880 --> 0:04:25.080 can help you find the right buyer if you have 0:04:25.120 --> 0:04:29.240 an item that's of particular specific niche value. That's that's true. 0:04:29.279 --> 0:04:30.920 So I will sell you that bedroom set for a 0:04:30.960 --> 0:04:32.880 little under two thousand dollars and you can take it 0:04:32.920 --> 0:04:37.000 to the consignment shop. Okay maybe maybe No, I'll give 0:04:37.040 --> 0:04:38.880 you eight hundred for it, and then I will go 0:04:38.920 --> 0:04:40.839 take it the consignment I put to you for eight hundred. 0:04:41.279 --> 0:04:43.040 Let honestly, I think I think it might end up 0:04:43.040 --> 0:04:46.720 around like in the eight range personally. Well, there, we'll see. 0:04:46.839 --> 0:04:50.120 That's one of the beautiful things I think about American 0:04:50.120 --> 0:04:54.040 capitalism is people can buy things. We want to talk 0:04:54.040 --> 0:04:56.120 about capital I know we will, we will in the sentise, 0:04:56.200 --> 0:04:59.520 But I have something just that middle middlemen or women 0:04:59.720 --> 0:05:03.719 can profit because of the laziness of other folks or 0:05:04.000 --> 0:05:08.120 you know, and you can have literally I'm lazy to 0:05:08.720 --> 0:05:13.680 business four kids, I too can be lazy and or 0:05:13.839 --> 0:05:17.240 or busy and find I'd rather have someone else maybe 0:05:17.279 --> 0:05:19.440 sell something on my behalf and maybe we both end 0:05:19.480 --> 0:05:22.440 up profiting, which is But all right, enough about that, Matt, 0:05:22.480 --> 0:05:24.440 Let's mention the beer we're having on this episode. This 0:05:24.440 --> 0:05:27.960 one is called Escape from Logger Mountain by Flying Machine Brewing. 0:05:28.000 --> 0:05:29.719 I think is that? What are they are? North Carolina? 0:05:29.760 --> 0:05:31.960 They got the North Carolina logo on there or the 0:05:32.000 --> 0:05:34.080 outline of the state. So that's how you know it's 0:05:34.160 --> 0:05:37.000 legit came from that actual state. Looking forward to enjoying 0:05:37.040 --> 0:05:39.520 us one today, buddy, Yeah, no doubt, me too. But 0:05:39.600 --> 0:05:41.599 let's move on. Let's let's ask the question. Is the 0:05:41.600 --> 0:05:43.840 stock market broken? We've got a lot of ground to 0:05:43.880 --> 0:05:46.680 cover on this on this one, Matt. And really, when 0:05:46.720 --> 0:05:49.360 you look at it, the stock market is the greatest 0:05:49.960 --> 0:05:54.080 wealth creating machine in history. And investing in the market 0:05:54.279 --> 0:05:57.480 to achieve millionaire status, like that's what people want, right, 0:05:57.480 --> 0:05:59.040 You want to become a millionaire, You want a million 0:05:59.080 --> 0:06:02.600 dollars in the retirement accounts. Well, that's become possible for 0:06:03.080 --> 0:06:06.080 such a large amount of folks in this country, in particular, 0:06:06.120 --> 0:06:09.440 thanks to workplace retirement accounts and low cost index funds. 0:06:09.839 --> 0:06:13.520 Fidelity alone one of our favorite brokerage houses. They reported 0:06:13.520 --> 0:06:17.760 that about four hundred and forty two investors have more 0:06:17.800 --> 0:06:20.480 than a million dollars in their four own case as 0:06:20.520 --> 0:06:23.960 of last year. That's just Fidelity customers. So we we 0:06:24.040 --> 0:06:26.960 potentially have millions of people who are millionaires in this 0:06:27.040 --> 0:06:30.360 country and it's easier to do than than ever before now. 0:06:30.680 --> 0:06:32.800 And it makes me think, Matt of maybe, like some 0:06:32.880 --> 0:06:35.040 of our earliest episodes of how the Money that we 0:06:35.200 --> 0:06:37.800 like to pretend never happened because they weren't that great. 0:06:38.520 --> 0:06:40.360 I kind of refused to go back and listen because 0:06:40.480 --> 0:06:42.640 I don't know that I could bear the weight of 0:06:42.640 --> 0:06:46.120 our in aptitude in those early as episodes. Not in aptitude, 0:06:46.279 --> 0:06:49.159 just lack of total awesomeness. You can say that we've 0:06:49.160 --> 0:06:51.080 gotten better. We've done a lot. In five D episodes, 0:06:51.080 --> 0:06:53.640 they were functional, yea, Like I pictured almost like a 0:06:53.680 --> 0:06:56.480 craftsman who's like a drywaller, somebody who knows how to 0:06:56.520 --> 0:06:59.080 do drywall, Like is that drywall up on the wall, 0:06:59.320 --> 0:07:01.800 does it hold? Does it create a wall? Yes, it's 0:07:01.880 --> 0:07:03.680 all of those things, but there's sort of an artistry 0:07:03.680 --> 0:07:07.640 to it, and that's what you develop over time. You 0:07:07.680 --> 0:07:11.080 can tell bad drywall, you see the seams, you see 0:07:11.120 --> 0:07:13.640 the tape protruding. Maybe I'm getting a little too poetic 0:07:13.640 --> 0:07:15.080 when I show to the podcast. We just sit out 0:07:15.080 --> 0:07:17.480 and talk. But we have gotten better at sitting down 0:07:17.520 --> 0:07:20.400 and talking. And just just because of the path hasn't 0:07:20.400 --> 0:07:22.280 always been smooth, I means some episodes have been better 0:07:22.280 --> 0:07:24.560 than others, and along the way, most of our episodes 0:07:24.600 --> 0:07:27.160 hopefully have generally gotten just a little bit easier for 0:07:27.200 --> 0:07:29.320 people to listen to. Well, that doesn't mean that the 0:07:29.360 --> 0:07:31.800 whole ride hasn't been worthwhile. And then those first episodes 0:07:32.080 --> 0:07:35.680 weren't necessary in part of the growth process. And right 0:07:35.720 --> 0:07:37.400 now it just kind of makes me think like, well, 0:07:37.440 --> 0:07:41.360 we're experiencing some market turbulence, and future predictions of what 0:07:41.400 --> 0:07:43.600 the stock market is going to do incoming years aren't 0:07:43.600 --> 0:07:47.040 looking so hot either, And so I don't know, should 0:07:47.040 --> 0:07:49.160 you not take a flight maybe because there's gonna be turbulence. 0:07:49.160 --> 0:07:52.080 Should you not go see your grandma because on the 0:07:52.120 --> 0:07:54.920 way there might be some bumpy bumpy ride in the air. No, 0:07:55.120 --> 0:07:57.360 of course you're still going to take the airplane ride 0:07:57.600 --> 0:07:59.960 in order to cut twenty hours off your trip if 0:08:00.040 --> 0:08:01.920 flying across the country. And so today on the show, 0:08:01.920 --> 0:08:04.200 we're gonna kind of talk about how we think you 0:08:04.240 --> 0:08:07.320 should be thinking about the current shopping market and then 0:08:07.360 --> 0:08:10.720 how that should also influence your your behavior. It's right, Yeah, 0:08:10.760 --> 0:08:13.360 you're saying that the general trajectory of the stock market 0:08:13.360 --> 0:08:15.640 has been up into the right, that's what we're talking 0:08:15.640 --> 0:08:18.760 about today, but more recently, like what you're specifically talking 0:08:18.760 --> 0:08:21.480 about here is volatility, because the stock market has been 0:08:21.480 --> 0:08:23.480 in the dumps. You know, this has been a terrible 0:08:23.480 --> 0:08:27.280 start to investing so far. Ino And like we often 0:08:27.280 --> 0:08:30.160 see during these bouts of volatility, a lot of investors 0:08:30.200 --> 0:08:32.040 they start wondering if if things are gonna be different 0:08:32.040 --> 0:08:33.800 this time. Right, it's been a it's been a good 0:08:33.840 --> 0:08:36.120 hundred years. It's been a good run. But it's all 0:08:36.120 --> 0:08:38.720 over now. And it's not just a chicken little mindset 0:08:38.760 --> 0:08:41.920 that's that's running amuck in your friend group. There are 0:08:41.960 --> 0:08:44.880 a ton of different financial forecasts out there that are 0:08:44.920 --> 0:08:47.200 being made about the fact that we're in for a 0:08:47.240 --> 0:08:50.040 lower performance year and and even less sellar returns for 0:08:50.120 --> 0:08:52.880 years to come. And it's not even just the talking 0:08:52.880 --> 0:08:55.680 heads like on CNBC sutting this nonsense. We can dismiss 0:08:55.760 --> 0:08:59.280 them pretty easily when the imney be exactly the different 0:08:59.280 --> 0:09:02.920 investing TV shows out there, respect the companies like Fidelity, 0:09:02.920 --> 0:09:06.000 like you just mentioned, like Vanguard, other large banks, they're 0:09:06.000 --> 0:09:09.280 predicting average tenure future returns in the three to four 0:09:09.320 --> 0:09:14.679 percent range, and those predictions could be significantly off in honestly, 0:09:14.720 --> 0:09:17.600 in either direction. Of course, these are just educated guesses, 0:09:18.040 --> 0:09:21.320 but given the last decade of incredible returns, they might 0:09:21.320 --> 0:09:24.240 not be too far off. But even still, what do 0:09:24.280 --> 0:09:27.760 we do with this information today? You know, should predictions 0:09:28.240 --> 0:09:32.319 of these appar future returns affect how we should invest today? 0:09:32.720 --> 0:09:34.920 That's what we're discussing today on the podcast. Yeah, so 0:09:35.040 --> 0:09:37.480 you you hinted at the fact that the last ten, ten, 0:09:37.480 --> 0:09:40.000 twelve years, Matt have been just incredible when it comes 0:09:40.000 --> 0:09:42.079 to stock market returns. And so let's talk about that 0:09:42.120 --> 0:09:44.880 bowl run for a second, because a lot of how 0:09:44.880 --> 0:09:48.440 the money listeners, they've really only experienced what it looks 0:09:48.440 --> 0:09:51.160 like to invest in the middle of a bowl run, 0:09:51.480 --> 0:09:54.640 not counting maybe like the blip we saw in when 0:09:54.679 --> 0:09:56.320 we thought it was the end of the world, but 0:09:56.679 --> 0:10:00.200 that recovery, that stock market covery. Recovery in the the 0:10:00.240 --> 0:10:03.559 teeth of the beginning of COVID was just incredibly rapid, 0:10:03.600 --> 0:10:05.800 so most of us barely experienced it, and that we're 0:10:05.800 --> 0:10:07.800 worried about other things too. At that exactly that that 0:10:07.880 --> 0:10:10.280 was a not is the stock market broken, but it's 0:10:10.360 --> 0:10:12.760 humanity broken. Yes, again, at that point there was bigger things, 0:10:12.760 --> 0:10:15.199 and once we got that under control, it's like, oh, okay, no, 0:10:15.280 --> 0:10:16.720 things are gonna be fine. But right now all the 0:10:16.720 --> 0:10:20.359 focus is more on the market because there's less societally 0:10:20.400 --> 0:10:22.720 to focus on. And when you when you look at 0:10:22.760 --> 0:10:27.000 these returns historically, like with returns over the past couple 0:10:27.000 --> 0:10:31.880 of years and almost average annual return since the Great Recession, 0:10:32.280 --> 0:10:34.760 some folks in their in their twenties and early thirties, 0:10:35.040 --> 0:10:37.400 they might have been starting to think that the stock 0:10:37.440 --> 0:10:40.720 market literally only ever goes up. Right now, you only 0:10:40.760 --> 0:10:44.360 get those peanut eminem's anytime you want, think wait on demand. 0:10:44.520 --> 0:10:47.000 Our recession is the thing in the past. Uh, And no, 0:10:47.200 --> 0:10:49.680 the answers is that's not the case. And so yeah, 0:10:49.800 --> 0:10:51.840 some folks started to think that cash was trash and 0:10:51.880 --> 0:10:55.360 that saving money was stupid. Investing, of course, is where 0:10:55.360 --> 0:10:58.520 it's at, and so yeah, but we we you and 0:10:58.559 --> 0:11:00.640 I we like investing. We're not hating on investing. We 0:11:00.640 --> 0:11:03.040 think it's necessary when it comes to building wealth, but 0:11:03.360 --> 0:11:06.640 not to the detriment of other prudent personal finance decisions. 0:11:06.640 --> 0:11:09.200 And so folks now are starting to realize maybe some 0:11:09.240 --> 0:11:12.600 of the importance of emergency funds or savings, liquid cash. 0:11:12.920 --> 0:11:16.440 Those are important things, even though it can feel like 0:11:16.480 --> 0:11:20.240 a dumb decision, especially in the short term when other 0:11:20.280 --> 0:11:22.840 people are finding ways to make money what looks like 0:11:22.920 --> 0:11:25.559 hand over fist and you're sitting there with that e 0:11:25.679 --> 0:11:28.680 fund intact and you're like, why am I not investing this? Well, 0:11:28.800 --> 0:11:31.559 I think now we're experiencing the reason why people should 0:11:31.600 --> 0:11:35.040 not be investing that emergency fund. There's a cushion that's 0:11:35.080 --> 0:11:36.880 necessary for folks to have. Yeah, I mean, this is 0:11:36.880 --> 0:11:39.160 why we came up with the seven money gears, because 0:11:39.200 --> 0:11:41.760 there's a formulate process that we want folks to go through, 0:11:41.760 --> 0:11:43.679 and it's not just about getting that cushion, but there 0:11:43.679 --> 0:11:45.880 are other important things to do as well. We definitely 0:11:45.880 --> 0:11:48.560 want folks to take that balanced approach. But yeah, you know, 0:11:48.600 --> 0:11:50.960 those outside gains that you're talking about, they were not 0:11:51.040 --> 0:11:55.360 going to last forever. Especially with the low interest rates 0:11:55.440 --> 0:11:58.720 we saw with the FED intervention like that all helped 0:11:58.720 --> 0:12:00.720 to speed some of the growth that we've scene, And 0:12:00.800 --> 0:12:03.040 so it's important to zoom out and to take a 0:12:03.080 --> 0:12:07.360 broader look at what the stock market typically returns because if, yeah, 0:12:07.400 --> 0:12:09.200 if you only paid attention to the past twelve or 0:12:09.200 --> 0:12:11.840 thirteen years, it can be easy to flee yourself into 0:12:11.880 --> 0:12:15.480 thinking that these outside returns are the new normal. So 0:12:15.559 --> 0:12:17.720 lately I've been running a good bit more. I'm trying 0:12:17.760 --> 0:12:21.160 to train for the Peachtree Road Race. That's Atlanta's premier 0:12:21.200 --> 0:12:24.360 tin k available to anybody who signs up for the 0:12:24.400 --> 0:12:27.720 most part. But like, it makes me think of track 0:12:29.000 --> 0:12:32.240 your closest friends. It's so many people. But okay, imagine 0:12:32.240 --> 0:12:34.640 if you you're training or like during a race, Uh, 0:12:34.760 --> 0:12:36.840 you're watching your time, You're you know, you're you're tracking 0:12:36.840 --> 0:12:38.960 your pace. You get to a portion of the race 0:12:39.000 --> 0:12:42.120 where there's maybe a long sort of easy downhill, you 0:12:42.160 --> 0:12:45.960 would see your pace just go off the charts, like 0:12:46.000 --> 0:12:49.600 you would see your your average pace just declined significantly. Uh, 0:12:49.600 --> 0:12:51.360 and it's gonna look like you're gonna be able to 0:12:51.360 --> 0:12:53.880 maybe set a personal record, maybe even a pr for 0:12:53.880 --> 0:12:57.040 your age group, who knows, But it would be foolish 0:12:57.240 --> 0:12:59.680 to just assume that you would be able to maintain 0:12:59.720 --> 0:13:03.199 that ace uh once you started to gain elevation again, 0:13:03.200 --> 0:13:05.000 which gets a heart attack hill, right, isn't that what 0:13:05.040 --> 0:13:08.240 they call it? Uh? Cardiac cardiac cardiac kill whatever it's like, 0:13:08.320 --> 0:13:10.360 rather next to the hospital. But the same is true 0:13:10.360 --> 0:13:11.920 with the market as well. You know, we've had some 0:13:11.960 --> 0:13:14.880 incredible bursts we've had we've had some periods of some 0:13:14.880 --> 0:13:17.000 stretches where it just, I mean, the returns were off 0:13:17.040 --> 0:13:19.960 the charts. And while we do believe that the market 0:13:19.960 --> 0:13:21.800 will continue to go up over time, you know it 0:13:21.840 --> 0:13:25.000 always does, that doesn't mean that the pace of that 0:13:25.040 --> 0:13:27.120 growth will stay the same. Yeah. No, I think that's 0:13:27.160 --> 0:13:29.240 a really good way of putting it, Matt, Because in 0:13:29.520 --> 0:13:31.640 that race, yeah, you're feeling good about your pace, but 0:13:31.679 --> 0:13:35.040 then you hit the tougher sections and you are inevitably 0:13:35.080 --> 0:13:37.600 going to slow down. So humans just can't run up 0:13:37.640 --> 0:13:40.960 hill as fast as they can run down. There's some 0:13:40.960 --> 0:13:43.280 folks who disagree with you, but really, oh yeah, there's 0:13:43.320 --> 0:13:45.559 there's people who who like to book it up hills. 0:13:45.640 --> 0:13:48.080 It's tough going fast down hills because I think personally, 0:13:48.120 --> 0:13:49.719 I think I'm more prone to injury because you're going 0:13:49.720 --> 0:13:53.800 a little bit fast, a little out of control. Yeah, 0:13:54.000 --> 0:13:55.719 that's gonna be the best acceleration. It's hard on the 0:13:55.800 --> 0:13:59.320 knees to write that's true. Well, it actually that reminds me, 0:13:59.360 --> 0:14:02.320 Matt of a piece that Barry red Holtz wrote recently. 0:14:02.360 --> 0:14:04.880 He's a financial writer and and he was discussing the 0:14:04.880 --> 0:14:07.760 fundamental reason that the market has been having a rough 0:14:07.840 --> 0:14:10.280 go of it lately, and he he uh talked about 0:14:10.280 --> 0:14:13.719 Occam's razor, which which basically means that the simplest explanation 0:14:13.880 --> 0:14:16.680 is almost always the correct one. And he was saying 0:14:16.720 --> 0:14:18.960 that that means that, well, the simplest explanation is just 0:14:19.120 --> 0:14:22.160 what's called mean reversion. That's at the heart of recent declines. 0:14:22.200 --> 0:14:24.560 It's the fact that we have experienced these outside gains 0:14:24.680 --> 0:14:27.240 and of course now we're paying the price as the 0:14:27.240 --> 0:14:29.680 stock market is retreating. And it's kind of it made 0:14:29.720 --> 0:14:31.480 me think of like a baseball player who starts off 0:14:31.520 --> 0:14:33.920 the season first month of the year hit more. Sports 0:14:34.360 --> 0:14:37.120 were hitting everybody with all the different illustrations we can 0:14:37.120 --> 0:14:39.480 think of, So baseball player hitting three seventy five, but 0:14:39.520 --> 0:14:43.200 typically they're hitting to fifty, Right, that's their normal average. 0:14:43.600 --> 0:14:45.600 That's pretty average, I would say, Actually, I don't know. 0:14:45.680 --> 0:14:48.400 In modern baseball though, more strikeouts the worst batting averages. Lately, 0:14:48.440 --> 0:14:50.760 it's really tough for sport to watch these days. Yeah, 0:14:51.000 --> 0:14:52.840 but but what if it's that your first time that 0:14:53.000 --> 0:14:54.640 bat and you get to hit your bat in a 0:14:54.680 --> 0:14:57.000 thousand That's right, that's true. Yeah, but what's what's the 0:14:57.040 --> 0:14:59.920 likelihood that's gonna last all season? Uh? Not likely unless 0:15:00.040 --> 0:15:02.120 get like some sort of season ending injury right after 0:15:02.160 --> 0:15:04.560 that hit, I guess. But yeah, it's a nice start 0:15:04.600 --> 0:15:06.400 of the season to be hitting close to four hundred. 0:15:06.440 --> 0:15:09.920 But in reality, you're going to experience mean reversion, especially 0:15:09.960 --> 0:15:12.120 in those dog days of summer. Even if you have 0:15:12.320 --> 0:15:16.040 a killer month in May, let's say July and August 0:15:16.040 --> 0:15:17.760 are gonna come around and your batting average is gonna 0:15:17.760 --> 0:15:19.680 start to dip. Start feeling that summer heat, let's start 0:15:19.960 --> 0:15:21.880 sweating a little bit more than you were down there 0:15:21.880 --> 0:15:24.360 in spring training. Plus, yeah, then you're an othern Colorado 0:15:24.400 --> 0:15:26.880 where it's nice and cool games into the season and 0:15:26.920 --> 0:15:29.480 you're probably starting to have some fatigue. There's just no 0:15:29.520 --> 0:15:31.920 way to continue it for a whole season. And and so, Yeah, 0:15:31.960 --> 0:15:33.680 that things are coming back down to earth, and the 0:15:33.720 --> 0:15:37.280 same thing is happening with the market. Right, those exorbitant 0:15:37.320 --> 0:15:39.800 returns that we've seen over the past you know, decade, 0:15:40.120 --> 0:15:42.440 they're not the new forever reality. Although I think some 0:15:42.480 --> 0:15:44.080 people were starting to think that it was. They were 0:15:44.080 --> 0:15:47.200 at least treating their money as though the stock market 0:15:47.400 --> 0:15:50.560 was this eminem candy machine that was going to continue 0:15:50.560 --> 0:15:53.400 to produce until we reached the moon status I guess, 0:15:53.480 --> 0:15:55.240 or whatever that was gonna be. I don't know. Yeah, 0:15:55.240 --> 0:15:57.200 and hopefully we're not bumming you out with this more 0:15:57.320 --> 0:16:00.840 somber conversation. But even though we are injecting you with 0:16:00.880 --> 0:16:03.440 a dose of realism, we still have plenty of reasons 0:16:03.480 --> 0:16:06.720 to believe that you should be investing in the stock market. Uh. 0:16:06.760 --> 0:16:09.240 And we're actually gonna talk some specifically about what you 0:16:09.240 --> 0:16:11.640 should be doing with this new information, the fact that 0:16:11.680 --> 0:16:14.120 not only have we entered some periods of volatility, about 0:16:14.120 --> 0:16:16.320 that there is some talk about the fact that the 0:16:16.360 --> 0:16:18.560 market may not be what it used to. We'll get 0:16:18.600 --> 0:16:29.400 to all of that right after this break. Aren't that 0:16:29.480 --> 0:16:31.640 we're back. We're still talking about the stock market. Is 0:16:31.640 --> 0:16:34.800 it broken or is this just uh, the reality of 0:16:34.840 --> 0:16:37.040 how the stock market works. We'll talk about maybe the 0:16:37.080 --> 0:16:38.800 fundamentals of how the stock market works here in a 0:16:38.840 --> 0:16:40.880 little bit, and we'll also talk about whether or not 0:16:40.920 --> 0:16:44.320 folks should be making changes to their portfolio kind of 0:16:44.320 --> 0:16:46.560 based on what's happening right now and based on some 0:16:46.600 --> 0:16:49.280 of the predictions, like you talked about those those Fidelity 0:16:49.320 --> 0:16:52.000 in Vanguard predictions where it's like growth gonna slow a 0:16:52.000 --> 0:16:55.040 good bit and and your portfolio isn't going to you're 0:16:55.040 --> 0:16:56.520 not going to see the games that you've been seeing, 0:16:56.720 --> 0:17:00.320 So then how do you approach that likely near term future. 0:17:00.480 --> 0:17:02.960 We'll discuss that in just a second. But I wanted 0:17:02.960 --> 0:17:05.480 to talk about optimism for a second, because you know, 0:17:05.680 --> 0:17:08.359 I think stock market optimism is a good thing for 0:17:08.400 --> 0:17:11.480 all of us to have, and I myself am pretty 0:17:11.520 --> 0:17:15.040 optimistic and just as an individual. But you know, I 0:17:15.040 --> 0:17:18.919 think it's also possible to take optimism to the extreme. Right. 0:17:18.960 --> 0:17:21.480 You can you can be so optimistic that you're not 0:17:21.520 --> 0:17:24.600 actually looking at facts on the ground, you're not living 0:17:24.640 --> 0:17:27.920 in reality. And so there's a difference between a healthy 0:17:27.960 --> 0:17:31.960 dose of optimism and being optimistic to a point where 0:17:31.960 --> 0:17:34.359 you're living in some sort of Mary Poppins Fantasy Mary 0:17:34.359 --> 0:17:37.280 Poppins returns the original, the original probably the new one's 0:17:37.280 --> 0:17:39.200 really good and it's good. It's good. The girls can't 0:17:39.240 --> 0:17:41.840 get enough of that. Abbie has been humming what is 0:17:41.840 --> 0:17:47.359 the Something music Hall? Yeah, I've only seen it once, 0:17:47.400 --> 0:17:49.920 so it's been will not stop humming? There. They got 0:17:49.920 --> 0:17:51.680 distracted when you said, Mary Popps, No, it's all good. 0:17:52.200 --> 0:17:54.920 But it's adorable when they start dancing with penguins and 0:17:54.920 --> 0:17:57.840 stuff like that. But but really they're you know, they're 0:17:57.840 --> 0:17:59.520 they're not in the real world at that point. They're 0:17:59.600 --> 0:18:01.960 not in reality. That's what we're talking about. And and 0:18:02.040 --> 0:18:03.520 this is what I think has happened to a lot 0:18:03.520 --> 0:18:06.280 of investors in the past couple of years, maybe even 0:18:06.320 --> 0:18:09.000 some how the money listeners. It's, you know, taking what 0:18:09.160 --> 0:18:11.520 is otherwise one of the greatest ways to build wealth, 0:18:11.600 --> 0:18:13.800 and and folks have attempted to make money in ways 0:18:13.840 --> 0:18:16.520 that don't make much sense. Right. That's given rise to 0:18:16.880 --> 0:18:20.159 n f t s, random crypto coins, and it is 0:18:20.200 --> 0:18:25.439 reflective of this frothy environment where sanity largely left the building. There. 0:18:25.600 --> 0:18:29.280 There's a difference i'd say between that reality based optimism 0:18:29.520 --> 0:18:33.680 that reflects what we're saying are historical realities, and then 0:18:33.720 --> 0:18:36.760 this overly rosy outlook that has I would say, has 0:18:36.800 --> 0:18:38.680 an element of greed at the heart of it, where 0:18:38.680 --> 0:18:42.200 people they're not content with average and what folks want 0:18:42.440 --> 0:18:45.160 is to make money at a pace that is otherworldly. 0:18:45.520 --> 0:18:48.440 But like our old pal Warren Buffett says, it's time 0:18:48.480 --> 0:18:50.199 to get fearful when others are greedy. And we have 0:18:50.320 --> 0:18:52.760 seen greedy behavior recently, and I think we're kind of 0:18:52.800 --> 0:18:54.480 on the other side of the hill from some of 0:18:54.480 --> 0:18:57.160 that greedy behavior. We're seeing maybe some of the demise 0:18:57.520 --> 0:18:59.840 of some of those more greedy behaviors. Yeah, you know, 0:19:00.040 --> 0:19:01.399 think it's worth pointing out too. I think one of 0:19:01.480 --> 0:19:03.919 the reasons we saw some of that greedy behavior, uh 0:19:04.200 --> 0:19:06.359 is because like think about the amount of money that 0:19:06.440 --> 0:19:09.440 was injected into our you know, speaking, I keep saying injections. 0:19:09.440 --> 0:19:13.040 We're talking about injecting realism, talking about injecting stimulus funds. 0:19:13.119 --> 0:19:15.680 But like we without having a left a finger, got 0:19:15.720 --> 0:19:18.440 so much money that we weren't necessarily counting on hug 0:19:18.520 --> 0:19:20.600 decentative Americans. Yes, it showed up in our bank and 0:19:20.680 --> 0:19:23.400 they couldn't spend exactly, and so what do you do 0:19:23.440 --> 0:19:26.040 with that I think you tend to make more speculative moves, 0:19:26.080 --> 0:19:28.240 like you tend to gamble that money with the chance 0:19:28.480 --> 0:19:30.920 that it might go up, especially as you've you've heard 0:19:30.920 --> 0:19:32.840 people talk about crypto for a while, Oh what are 0:19:32.880 --> 0:19:35.000 these new n f T s, And you start taking 0:19:35.040 --> 0:19:36.920 that money, you start putting it in there, and the 0:19:36.960 --> 0:19:38.960 two people getting rich quickly, and you're like, I better 0:19:39.080 --> 0:19:41.520 jump in on that exactly. But like that certainly has 0:19:41.560 --> 0:19:44.280 been something that has changed. And when others out there 0:19:44.359 --> 0:19:46.560 were a little more greedy, hopefully we should have been 0:19:46.560 --> 0:19:48.240 a little more fearful. But like you said, we're we're 0:19:48.280 --> 0:19:51.080 kind of seeing the tide shifts. We're starting to see 0:19:51.080 --> 0:19:54.760 it go out that optimism has quickly shifted to pessimism. 0:19:54.880 --> 0:19:57.480 It's it seems like, speaking of CNBC that they released 0:19:57.480 --> 0:19:59.680 a survey last month and it showed that only twenty 0:19:59.720 --> 0:20:01.919 eight or sent of investors think that it's currently a 0:20:01.960 --> 0:20:04.520 good time to be in stocks right now. People are 0:20:04.560 --> 0:20:07.280 just less enthusiastic about stocks because they aren't doing so 0:20:07.320 --> 0:20:10.320 hot right now. Uh. And the thing is, though the 0:20:10.359 --> 0:20:13.080 market it doesn't care about how you're feeling. For instance, 0:20:13.080 --> 0:20:15.639 the ridiculously short COVID blip like you mentioned, So like 0:20:15.720 --> 0:20:18.280 that's what that taught us, I think, because our our 0:20:18.320 --> 0:20:21.880 collective society was at that point in time reeling from 0:20:22.000 --> 0:20:25.720 pandemic fallout, uncertainty. Yeah, yeah, yeah, there's a lot that 0:20:25.760 --> 0:20:29.800 we didn't know. But simultaneously the market was climbing rapidly. Uh. 0:20:29.840 --> 0:20:32.879 And so the current pessimistic mood, it often means that 0:20:33.080 --> 0:20:36.440 long term investors like ourselves, I think, should become even 0:20:36.640 --> 0:20:40.560 more optimistic, taking advantage of stock declines so that our 0:20:40.600 --> 0:20:43.439 investment dollars go even further. Because the flip side of 0:20:43.480 --> 0:20:45.560 that war Buffet quote I gave Matt, he says to 0:20:45.600 --> 0:20:47.639 get fearful when others are greedy. Well, we'll be greedy 0:20:47.680 --> 0:20:49.800 when others are fearful. And so now that the tide 0:20:49.960 --> 0:20:54.439 is shifting, stocks are down, who is out there buying 0:20:54.600 --> 0:20:57.640 more stocks? It's warm, Buffet is and I think it's 0:20:57.720 --> 0:21:00.639 a sign that we should be too. When more people 0:21:00.680 --> 0:21:05.000 are pessimistic rather than optimistic, and the consumer sentiment has 0:21:05.040 --> 0:21:07.400 essentially shifted in terms of how they view the stock market, 0:21:07.640 --> 0:21:10.040 it's time for us to maybe take the opposite approach, 0:21:10.280 --> 0:21:12.680 putting more of our money to work. And it's also 0:21:12.800 --> 0:21:15.320 important to point out that the economy is not the 0:21:15.320 --> 0:21:18.040 stock market. There's a lot of talk about the risk 0:21:18.160 --> 0:21:20.600 of the Fed, you know, tipping the economy into a 0:21:20.640 --> 0:21:24.080 recession due to the need to raise interest rates because 0:21:24.320 --> 0:21:28.160 of inflation. Inflation is obviously running hot and the FED 0:21:28.240 --> 0:21:30.359 is trying to get that under control. We talked about 0:21:30.359 --> 0:21:32.359 this actually in episode five oh three when we were 0:21:32.359 --> 0:21:36.840 talking about preparing for a looming recession. Looming recession. That's right, 0:21:36.880 --> 0:21:40.359 that's right if you recall and a recession is defined 0:21:40.359 --> 0:21:45.040 as two consecutive quarters of GDP decline. But the fact 0:21:45.440 --> 0:21:48.720 is that the stock market, it doesn't necessarily decline during 0:21:48.720 --> 0:21:51.359 a recession. If you look at the past seventy years, 0:21:51.440 --> 0:21:56.560 the average return during a recession was negative one And 0:21:56.680 --> 0:21:58.960 you might say, ah, so the market does go down 0:21:59.680 --> 0:22:03.320 full is You're wrong, But it's interesting in reality, the 0:22:03.359 --> 0:22:06.240 returns are even worse in the lead up to a recession. 0:22:06.520 --> 0:22:09.520 So on average, the stock market returned negative two percent 0:22:09.640 --> 0:22:13.280 six months prior to a recession and negative three a 0:22:13.359 --> 0:22:16.080 year twelve months prior to a recession. And so yeah, 0:22:16.119 --> 0:22:19.119 if you want to guess stock market returns after the 0:22:19.160 --> 0:22:24.400 recession begins seven to between six and twelve months are 0:22:24.560 --> 0:22:27.399 the return so in the in the extreme positive range 0:22:27.720 --> 0:22:30.879 after the startup recession. It's it's amazing how the market 0:22:30.960 --> 0:22:34.480 is almost like forecasting the where the economy is going 0:22:34.520 --> 0:22:37.399 to eventually end up. They're not always going in lockstep together, 0:22:37.600 --> 0:22:40.960 which only reinforces the fact that it's difficult, incredibly difficult 0:22:40.960 --> 0:22:43.159 to time the market and to figure out when is 0:22:43.160 --> 0:22:46.199 the actual bottom as the market is looking ahead. But 0:22:46.240 --> 0:22:48.920 this only reinforces that warm buffet quote right, often when 0:22:48.920 --> 0:22:51.360 things look bad, that is the best time to invest, 0:22:51.920 --> 0:22:55.560 which obviously, again it seems counterintuitive, and we mentioned that 0:22:55.640 --> 0:22:58.760 the historical reality of the stock market just a second ago, 0:22:58.960 --> 0:23:02.240 So let's talk about that. For the earnings of publicly 0:23:02.240 --> 0:23:05.600 traded companies as a whole continue to go up over time, 0:23:06.000 --> 0:23:08.719 not every company progresses at the same pace um, and 0:23:08.800 --> 0:23:11.960 some companies are are actually declining while others are booming. 0:23:12.200 --> 0:23:16.000 But overall, if you own a diversified basket of companies, 0:23:16.480 --> 0:23:18.560 say for instance, in a Total Stock Market Index fund 0:23:18.640 --> 0:23:20.440 or the smp F I funder, you're going to see 0:23:20.440 --> 0:23:24.280 your money grow over time. Because the average return of 0:23:24.320 --> 0:23:28.040 the market since has been nine eight percent a year. 0:23:28.400 --> 0:23:32.040 And so this this beautifully creative and simultaneously destructive machine 0:23:32.400 --> 0:23:36.720 of capitalism. It just continues. It's march again upboards and onwards, 0:23:37.200 --> 0:23:41.200 even when world events are scary and when consumer confidence 0:23:41.240 --> 0:23:43.280 is low, which it is right now. Yeah, Matt, what 0:23:43.400 --> 0:23:46.920 what you're talking about here? These returns, these historic returns, 0:23:46.920 --> 0:23:51.440 are based on the underlying reality that of capitalism. And 0:23:52.000 --> 0:23:55.479 it's as these companies, these individual companies are participating in 0:23:55.480 --> 0:23:58.960 this overall system that we have. They are benefiting all 0:23:59.040 --> 0:24:01.560 of us as they create new items, as new technology 0:24:01.600 --> 0:24:04.840 comes out, drives prices down and it drives innovation up. 0:24:05.200 --> 0:24:08.040 And in episode four seventy nine, we discussed why we 0:24:08.040 --> 0:24:11.600 feel like capitalism is ultimately a force for good. And 0:24:11.720 --> 0:24:14.000 if you'd access the question is it is it only 0:24:14.040 --> 0:24:16.119 a good thing? We would say no, free markets that 0:24:16.160 --> 0:24:18.320 they don't fix everything. There are other problems in our 0:24:18.359 --> 0:24:21.480 society that need to be remedied other ways. But ultimately 0:24:21.560 --> 0:24:24.320 it's the best economic system that we've got and it's 0:24:24.359 --> 0:24:26.720 increased living standards and it's brought more folks out of 0:24:26.720 --> 0:24:29.880 poverty than anything else humans have tried. And so, yeah, 0:24:29.920 --> 0:24:33.440 businesses that we invest in, they're working to create value 0:24:33.760 --> 0:24:36.280 in our society. And if they find a customer base 0:24:36.320 --> 0:24:39.640 and they succeed. Profit is the end results, and as 0:24:39.680 --> 0:24:42.199 investors in the stock market, we get to participate in 0:24:42.240 --> 0:24:44.040 some of those profits, which I think is the coolest 0:24:44.040 --> 0:24:46.480 thing ever. It kind of almost doesn't seem fair Matt, 0:24:46.760 --> 0:24:49.879 that we can kick back and passively invest. It almost 0:24:49.880 --> 0:24:51.840 doesn't use almost none of our brain energy, just use 0:24:51.880 --> 0:24:54.439 our dollars and still see something. I get ten percent 0:24:54.480 --> 0:24:58.120 return over the past hundred years. But really, for the 0:24:58.240 --> 0:25:02.479 average index investor, for the lazy, boring investor route like 0:25:02.520 --> 0:25:04.960 we are, like we want people to take, it's quite 0:25:04.960 --> 0:25:07.400 simple and history points to the fact that it's it's 0:25:07.480 --> 0:25:09.800 quite effective in helping us build wealth. Yeah, it's really 0:25:09.800 --> 0:25:13.359 interesting too, is to consider how the market, how it 0:25:13.400 --> 0:25:16.240 self regulates, right, because if you take that, imagine the 0:25:16.280 --> 0:25:18.960 situation like a worst case scenario where you've got everybody 0:25:18.960 --> 0:25:21.320 has become a passive investor and nobody is innovating. Well, 0:25:21.359 --> 0:25:23.679 what's going to happen to the stock market returns? You 0:25:23.680 --> 0:25:26.240 could argue you could foresee a world where you could 0:25:26.240 --> 0:25:29.040 see those returns decline, right, because if fewer people are 0:25:29.040 --> 0:25:31.000 out there taking risks, because everybody wants to play it 0:25:31.080 --> 0:25:34.040 safe and invest in the entire stock market. There is 0:25:34.040 --> 0:25:36.600 technically less value being brought into the world, which means 0:25:36.720 --> 0:25:39.440 lower returns, but it's self regulating in this way because 0:25:39.480 --> 0:25:41.480 there are going to be individuals who say, well, I 0:25:41.480 --> 0:25:43.639 want to see a higher return, and so they are 0:25:43.680 --> 0:25:46.840 then willing to risk their dollars in ways that ultimately 0:25:46.920 --> 0:25:49.520 need to provide more value and more benefits to the 0:25:49.520 --> 0:25:52.400 world in order for them to receive the benefit from 0:25:52.480 --> 0:25:55.920 that direct investment. And of course people who invest within 0:25:55.960 --> 0:25:58.280 that company, you know, within those individuals as well, we'll 0:25:58.280 --> 0:26:00.920 see these higher returns I mentioned because you could foresee 0:26:00.920 --> 0:26:03.680 a world where it's just like, well, if everybody becomes 0:26:03.720 --> 0:26:06.719 passive total stock market investors, well maybe we are going 0:26:06.720 --> 0:26:08.639 to see declines in the market. But ultimately I almost 0:26:08.640 --> 0:26:10.879 see it as like this automatic leveling system that's just 0:26:10.960 --> 0:26:13.760 inherently built into the market. But there will always be 0:26:13.760 --> 0:26:16.119 people who think that they're smarter and who want bigger, 0:26:16.160 --> 0:26:18.359 better returns, or just want to do something different, you know, 0:26:18.440 --> 0:26:20.560 like like there will be individuals who want that autonomy 0:26:20.560 --> 0:26:22.760 and don't want to sit back because they've got something 0:26:22.800 --> 0:26:24.880 to create. They have something that they want to introduce 0:26:24.920 --> 0:26:26.800 into the world. They want to make their mark, and 0:26:26.840 --> 0:26:29.560 so I think there will always be opportunity for us 0:26:29.880 --> 0:26:33.000 kick back style passive investors because of those other folks 0:26:33.040 --> 0:26:34.800 on on the other side of the spectrum. Exactly. It's 0:26:34.800 --> 0:26:36.600 it's super cool when you think about it that way, 0:26:36.840 --> 0:26:39.760 but there will be carnage along the way of the 0:26:39.800 --> 0:26:42.480 stock market growth. You don't get the reward without the risk. 0:26:42.920 --> 0:26:45.119 You're not going to see that average tim percent return 0:26:45.200 --> 0:26:48.000 without some subpar years. Uh, it comes with the territory. 0:26:48.240 --> 0:26:51.639 But overall, the economy will continue to grow and corporations 0:26:51.680 --> 0:26:55.000 that you can invest in will continue to earn more money. 0:26:55.359 --> 0:26:58.040 And again, some companies they're gonna stick around for decades, 0:26:58.280 --> 0:27:00.720 creating loads of profit for investor is, but others won't 0:27:00.720 --> 0:27:03.360 stick around for for long or do anything terribly noteworthy. 0:27:03.480 --> 0:27:06.240 And that is one of the coolest aspects of capitalism 0:27:06.359 --> 0:27:10.399 is that it automatically self cleanses. The market decides what 0:27:10.520 --> 0:27:12.520 companies are going to stick around and which one's get 0:27:12.520 --> 0:27:16.000 the boot. But again, the general trajectory is up into 0:27:16.040 --> 0:27:18.679 the right. It's it's healthy to remind ourselves that the 0:27:18.840 --> 0:27:21.919 entire value of the U stock market, the entire market, 0:27:21.960 --> 0:27:26.360 was one point to trillion dollars back in Apple alone 0:27:26.680 --> 0:27:28.479 is worth significantly more than that. Right now, I think 0:27:28.480 --> 0:27:31.240 it's double that. And so we've got enough historical data 0:27:31.240 --> 0:27:33.920 in our corner to point to the reality that despite 0:27:34.119 --> 0:27:38.040 these immediate market setbacks that we're experiencing, progress will continue 0:27:38.320 --> 0:27:41.119 and we can all benefit from that progress. This is 0:27:41.119 --> 0:27:44.240 why we're optimistic. It's not because we have some sort 0:27:44.240 --> 0:27:46.520 of pie in the sky reason to think that things 0:27:46.520 --> 0:27:48.800 will always get better. We can look back at history. 0:27:49.000 --> 0:27:51.159 History informs the future. It is not guaranteed, but we 0:27:51.200 --> 0:27:53.320 can be encouraged by that fact. Yeah, it's not some 0:27:53.359 --> 0:27:57.159 sort of Pollyanna, no hoping and wishing, or it's not 0:27:57.240 --> 0:27:59.639 like in Ostrich putting our head in the sand, just 0:27:59.720 --> 0:28:03.480 kind of against all odds, wanting something to be the case. 0:28:03.600 --> 0:28:06.880 It is truly the historical reality. We have precedent really 0:28:06.880 --> 0:28:09.760 that we can look to telling us what the stock 0:28:09.800 --> 0:28:12.160 market is likely to do in the years ahead, and 0:28:12.320 --> 0:28:16.640 despite massive shifts to the way our country functions, will 0:28:16.640 --> 0:28:20.280 continue to be the greatest wealth building machine moving forward. 0:28:20.720 --> 0:28:23.160 But if you want it to be that in your life, 0:28:23.200 --> 0:28:24.399 if if you want to be able to use the 0:28:24.440 --> 0:28:27.640 stock market to your advantage, well there are some things 0:28:27.680 --> 0:28:29.800 you're gonna need to realize and and one of those 0:28:29.840 --> 0:28:32.879 things might be making some changes to the way that 0:28:32.960 --> 0:28:35.800 you're investing. And so we'll talk about whether the current 0:28:35.800 --> 0:28:40.000 market reality and you know, future lower return predictions should 0:28:40.040 --> 0:28:42.920 actually cause you to do anything different with your portfolio. 0:28:43.000 --> 0:28:45.200 In the here and now. We'll get to some of 0:28:45.200 --> 0:28:56.520 our thoughts on that right after this. Alright, we're back 0:28:56.520 --> 0:28:59.080 to the break talking about investing in the market. And 0:28:59.120 --> 0:29:02.480 I still have that song stuck in my head. Uh 0:29:02.560 --> 0:29:06.480 do you'm are you? I'm not a fan of that. Yeah, 0:29:06.480 --> 0:29:08.600 I guess we just haven't I don't know, watched it again. Then, well, 0:29:08.720 --> 0:29:10.920 maybe we should only cranks out the hits. If you 0:29:10.960 --> 0:29:14.400 can invest in a person, invest in him, I think. 0:29:14.440 --> 0:29:16.400 I think you're right, him and Tom Brady. Maybe maybe 0:29:16.440 --> 0:29:18.080 they're both at the top of their game and there's 0:29:18.120 --> 0:29:19.920 only you can only go down from here. I think so. 0:29:20.000 --> 0:29:22.840 I mean, lin Manuel is one of those prolific individuals 0:29:22.960 --> 0:29:25.040 who everything he creates seems to turn to gold. It's 0:29:25.080 --> 0:29:28.120 got that Midas touch. Hamilton's obviously, in conto another one. 0:29:28.120 --> 0:29:30.440 I mean, just really, if you get him involved in 0:29:30.480 --> 0:29:33.600 a project, it's gonna be great. Okay. I feel like 0:29:33.600 --> 0:29:36.240 we're going off track again, but we're talking about investing, 0:29:36.320 --> 0:29:38.480 and we've talked through some of these some of these 0:29:38.520 --> 0:29:40.880 trends that we're seeing here in the near term. We're 0:29:40.880 --> 0:29:43.880 talking about the overall larger trend of the stock market, 0:29:43.960 --> 0:29:46.760 which you should expect. But there are a few things 0:29:46.760 --> 0:29:48.640 that you can do differently with the information that we've 0:29:48.680 --> 0:29:51.280 talked about so far, and with the predictions that we 0:29:51.280 --> 0:29:53.200 we truly may not see the kind of returns that 0:29:53.240 --> 0:29:55.560 we've seen over the past twelve thirteen years. There are 0:29:55.560 --> 0:29:57.760 a few things that you can do differently with this information, 0:29:57.800 --> 0:30:00.280 the fact that returns may not be what they once 0:30:00.320 --> 0:30:02.200 we're and so for starters, one of these things that 0:30:02.240 --> 0:30:05.400 you can do is start salking away more money. If 0:30:05.640 --> 0:30:08.120 returns are likely to be lower, you might need to 0:30:08.160 --> 0:30:10.840 invest more of your paycheck in order to reach some 0:30:10.920 --> 0:30:14.160 of your financial goals. If that's something that is financially 0:30:14.240 --> 0:30:17.280 possible for you, ramping out the percentage that you are 0:30:17.320 --> 0:30:19.920 stalking away is a solid move. We're not necessarily talking 0:30:19.960 --> 0:30:23.400 about taking extreme measures extreme steps here, but just to 0:30:23.520 --> 0:30:26.080 keep doing what you what you've been doing, but maybe 0:30:26.160 --> 0:30:27.920 just ratching it up a little bit. You might want 0:30:27.920 --> 0:30:30.040 to increase that amount that you are investing, put your 0:30:30.040 --> 0:30:32.960 foot on the pedal just a little bit harder, and 0:30:33.040 --> 0:30:35.720 add a couple extra percentage points maybe to what you're 0:30:35.720 --> 0:30:39.040 putting into your four one K. Investing more in light 0:30:39.160 --> 0:30:43.680 of potentially inferior returns moving forward is one great way 0:30:43.720 --> 0:30:46.720 to kind of counterbalance things and to make sure that 0:30:46.760 --> 0:30:49.120 you're gonna hit those financial goals that you've got for yourself. 0:30:49.200 --> 0:30:51.120 And hear what we're saying here, This is just a 0:30:51.200 --> 0:30:54.280 slight change to the behavior that you're already doing. You're 0:30:54.280 --> 0:30:56.960 already going in the right direction. Just maybe just juice 0:30:56.960 --> 0:30:58.520 it just a little bit more. We're not telling you 0:30:58.560 --> 0:31:01.240 to pull the e break, you know. We're not telling 0:31:01.280 --> 0:31:03.959 you just throw it in reverse and totally wreck your vehicle. 0:31:04.200 --> 0:31:06.040 We're not telling you to start serving or we're not 0:31:06.080 --> 0:31:09.000 telling you that at the last second exit off the highway, 0:31:09.160 --> 0:31:11.840 cutting a bunch of people off and potentially reckon yourself. 0:31:11.840 --> 0:31:14.000 That is not what we want you to do your portfolio. 0:31:14.040 --> 0:31:15.280 And we don't even need you to like pedal to 0:31:15.320 --> 0:31:17.320 the metal right like you can. You don't have to 0:31:17.400 --> 0:31:20.600 go from saving eight percent of your paycheck to saving 0:31:21.480 --> 0:31:24.240 right that's just not necessary. But in light of those 0:31:24.560 --> 0:31:28.840 future inferior returns, then stacking more money away does make 0:31:28.880 --> 0:31:31.360 more sense. And another another course of action that you 0:31:31.400 --> 0:31:36.000 could take is to take more risks with your investments. Right, 0:31:36.240 --> 0:31:38.560 this is something that that needs to be discussed mat 0:31:38.600 --> 0:31:41.400 but really it's best done on a case by case scenario. 0:31:41.480 --> 0:31:43.640 It's hard for us to tell everyone that they should 0:31:43.640 --> 0:31:47.240 be adding more risk to their portfolio because we've got 0:31:47.240 --> 0:31:49.840 listeners of all ages and stages, people who are in 0:31:49.840 --> 0:31:51.560 the wealth building phase of their life to people who 0:31:51.640 --> 0:31:53.800 are in the wealth preservation stage of their life, and 0:31:53.800 --> 0:31:56.200 and there's a different tact that needs to be taken 0:31:56.640 --> 0:31:59.240 for each of those individuals depending on where they are. 0:31:59.640 --> 0:32:02.360 And I think for some people accepting more risks it 0:32:02.400 --> 0:32:04.640 makes sense if there if they are still in the 0:32:04.640 --> 0:32:07.040 wealth building phase of life, and you know, the short 0:32:07.120 --> 0:32:09.920 term bouts of turbulence aren't going to significantly impact them, 0:32:10.080 --> 0:32:12.920 and so it's actually gonna help boost their returns if 0:32:12.960 --> 0:32:16.720 their dollar cost averaging by investing in a slightly more 0:32:16.880 --> 0:32:19.440 risky way. And what I mean by that is mostly 0:32:19.440 --> 0:32:22.960 that if you're if you have an insufficient allocation of 0:32:23.040 --> 0:32:26.320 your investment portfolio towards stocks, so ramping that up and 0:32:26.320 --> 0:32:29.600 having more exposure to the stock market in the future 0:32:29.840 --> 0:32:33.560 could and should over the years, actually help boost your returns. 0:32:33.560 --> 0:32:36.320 But but then for others, taking on more risk could 0:32:36.560 --> 0:32:39.320 impact their ability to retire, Matt, It can have a 0:32:39.400 --> 0:32:42.840 significantly negative impact if you have too much stock market 0:32:42.840 --> 0:32:44.880 exposure and you need those funds in the new term, 0:32:44.960 --> 0:32:46.960 if you have to start drawing on those funds because 0:32:47.120 --> 0:32:49.280 you're quitting work. So for instance, like my parents, they're 0:32:49.320 --> 0:32:52.360 supposed to be quitting work altogether in the next within 0:32:52.400 --> 0:32:54.840 the next nine months, and there's no way I would 0:32:54.840 --> 0:32:57.040 tell them that they should have more stock market exposure 0:32:57.040 --> 0:32:59.760 at this point in in their life. And so, yeah, 0:32:59.800 --> 0:33:02.520 you have to kind of take your own specific situation 0:33:02.640 --> 0:33:06.080 into account. More risk is helpful for some but harmful 0:33:06.120 --> 0:33:08.600 for others. Yeah, that is a healthy way to expose 0:33:08.640 --> 0:33:11.240 yourself to more risk, because if you're if you're in 0:33:11.280 --> 0:33:13.280 your twenties, you don't need to be in a sixty 0:33:13.360 --> 0:33:17.520 forty portfolio where where you've got bonds, Uh, you should 0:33:17.560 --> 0:33:22.000 probably be in stocks. I'm nearly forty and I in stocks. 0:33:22.000 --> 0:33:24.600 But that can be a healthy approach to adding more 0:33:24.680 --> 0:33:27.520 risk to your portfolio. But you can also you could 0:33:27.800 --> 0:33:30.040 veer off the highway and take this, you know, into 0:33:30.240 --> 0:33:32.640 into the danger zone. Some folks in search of high 0:33:32.720 --> 0:33:36.440 returns have opted for even riskier asset classes like crypto, 0:33:36.520 --> 0:33:39.800 which is still a highly unproven and very speculative place 0:33:39.960 --> 0:33:42.360 to put your money. Some folks have seen their wealth 0:33:42.400 --> 0:33:45.680 cut in half or or even more with no real 0:33:45.760 --> 0:33:48.320 historical assurance that there is going to be a significant 0:33:48.360 --> 0:33:51.560 bounce back by any means. Uh. And you know, can 0:33:51.640 --> 0:33:53.360 you gotta ask yourself, can you stomach that sort of 0:33:53.440 --> 0:33:57.080 draw down? Because knowing your specific timeline, knowing your talents 0:33:57.080 --> 0:33:58.880 for risk is this is all going to be crucial 0:33:58.920 --> 0:34:01.600 information before we start amping up your risk level. And 0:34:01.680 --> 0:34:03.720 for a lot of folks, the best course of action 0:34:03.880 --> 0:34:05.640 is to keep doing whatever it is that you're doing 0:34:05.720 --> 0:34:09.120 right now, even in the midst of subpar market predictions. 0:34:09.200 --> 0:34:11.200 We would not recommend for you to gamble in order 0:34:11.239 --> 0:34:14.239 to increase your return. Just stay the course. Yeah, Matt, 0:34:14.280 --> 0:34:16.880 there is a certain window in which taking on more 0:34:16.960 --> 0:34:19.040 risk might make sense for people. But then there is 0:34:19.480 --> 0:34:21.080 the ability you can turn the risk style up to 0:34:21.160 --> 0:34:24.080 like nine thousand, and that is what putting let's say 0:34:24.120 --> 0:34:27.160 everything in toward into different crypto coins would be and 0:34:27.160 --> 0:34:29.839 and some folks have taken that approach and it has 0:34:30.080 --> 0:34:32.759 hit him right where it hurts lately, because, yeah, the 0:34:32.760 --> 0:34:35.239 crypto market has been not so great. And no matter 0:34:35.239 --> 0:34:37.200 what Matt, there are a few things that people should 0:34:37.360 --> 0:34:41.080 always pay attention to, whether we're experiencing a bowl or 0:34:41.120 --> 0:34:43.000 a bear market. And if you pay attention to these 0:34:43.400 --> 0:34:46.240 few things in particular, I think people are are likely 0:34:46.680 --> 0:34:49.120 to have a good wealth building experience over the years. 0:34:49.160 --> 0:34:51.560 And it doesn't mean they won't be immune from downturns 0:34:51.600 --> 0:34:54.239 or portfolio losses, but it will mean they'll be able 0:34:54.280 --> 0:34:56.719 to stay the course and they'll be able to experience 0:34:56.840 --> 0:35:01.480 the wealth generating abilities of the overall style market over 0:35:01.520 --> 0:35:04.640 the years over the decades. And so let's talk about 0:35:04.640 --> 0:35:07.319 a few of those things. One is choosing the right 0:35:07.360 --> 0:35:11.760 funds to invest in and specifically opting for diversification, because 0:35:12.239 --> 0:35:16.080 I will say having a diversified portfolio has felt pretty 0:35:16.080 --> 0:35:19.560 boring over the past few years. In particular, Uh, there 0:35:19.560 --> 0:35:21.800 have been a lot of people chatting about Cathy Wood 0:35:21.840 --> 0:35:24.239 and her ARC fund a r k K, which is 0:35:24.440 --> 0:35:27.120 the innovation fund killed it during the pandemic. Yeah, I 0:35:27.120 --> 0:35:29.080 mean like to see some of the returns. She was 0:35:29.120 --> 0:35:32.200 experiencing the exploding growth of some of the companies that 0:35:32.280 --> 0:35:34.720 she was betting on. It drew a lot of eyeballs, 0:35:34.719 --> 0:35:36.640 that drew a lot of media attention, and it drew 0:35:36.719 --> 0:35:40.359 a lot of investor dollars. People were excited, they wanted 0:35:40.400 --> 0:35:43.239 to participate, they wanted to be a part of the 0:35:43.320 --> 0:35:47.439 next big investment fund. And so yeah, it's it's drawn 0:35:47.560 --> 0:35:50.720 actually some similar interest as the fund has been plumbing 0:35:50.880 --> 0:35:53.600 recently too. And it can just be tough though for 0:35:53.640 --> 0:35:56.200 people to watch while other people out there in the 0:35:56.239 --> 0:36:01.040 investing space are making a killing when you're just humming 0:36:01.120 --> 0:36:08.359 along getting basic average SMP level returns. And so yeah, diversification, though, 0:36:08.560 --> 0:36:10.440 it can be boring on the way up, but it's 0:36:10.440 --> 0:36:12.200 a lifesaver on the way down, because when you look 0:36:12.239 --> 0:36:15.360 at what's happened with that Arc Innovation Fund just in 0:36:15.400 --> 0:36:16.880 the last six months, and when you look at what's 0:36:16.880 --> 0:36:19.000 happening to the overall stock market, you know what, it's 0:36:19.000 --> 0:36:21.239 a whole lot easier to stomach what's been happening in 0:36:21.280 --> 0:36:23.960 the overall stock market than it is in just a 0:36:24.040 --> 0:36:27.200 handful of those high flying stocks. Anybody who decided to 0:36:27.239 --> 0:36:30.080 invest most of their retirement in that arc fund is 0:36:30.239 --> 0:36:33.399 understandably freaking out right now because the roller coaster ride 0:36:33.400 --> 0:36:35.400 they've been on and right now they are not sitting 0:36:35.440 --> 0:36:37.920 in a good place. And I would be frightened if 0:36:37.960 --> 0:36:39.600 I if I had my money there. And so I 0:36:39.600 --> 0:36:42.239 think that diversification point is is crucial. Finding a fund 0:36:42.280 --> 0:36:45.480 that's that's highly diversified, that gives you a wide exposure 0:36:45.520 --> 0:36:48.040 to the overall stock market is is important so that 0:36:48.080 --> 0:36:50.279 you're not putting all your eggs in one basket or 0:36:50.320 --> 0:36:52.520 just a few baskets. That's right. Yeah, So regardless of 0:36:52.520 --> 0:36:55.680 what the market is doing, pay attention to the choice 0:36:55.719 --> 0:36:57.680 of funds that you're putting your money in. UH And 0:36:57.760 --> 0:37:00.000 a part of that's a part of that fund choice 0:37:00.040 --> 0:37:03.960 is paying attention to the all important expense ratio as well. 0:37:04.000 --> 0:37:05.360 We we don't want you to pay more when you 0:37:05.360 --> 0:37:08.719 don't need to, because these fees will eat into your returns, 0:37:08.840 --> 0:37:12.120 especially the longer you plan to continue investing those dollars. 0:37:12.440 --> 0:37:14.960 You want to make sure that you are kneecapping yourself 0:37:15.200 --> 0:37:19.000 and experiencing poor returns due to a poor choice of funds. 0:37:19.280 --> 0:37:21.319 And so if you've been listening for any amount of time, 0:37:21.360 --> 0:37:24.440 you know that we love Vanguard, we love Fidelity and Schwab. 0:37:24.880 --> 0:37:28.880 Those are the discount brokerages who offer the diversified total 0:37:28.880 --> 0:37:32.880 market style funds that we love with microscopic to virtually 0:37:32.920 --> 0:37:36.280 non existent fees when we're talking hundreds of a percentage 0:37:36.320 --> 0:37:38.719 point when it comes to what they're charging you, that's 0:37:38.800 --> 0:37:41.239 what we want to see, either that or nothing at all. Yeah, 0:37:41.320 --> 0:37:43.960 but I see those higher fees as like insult to injury, 0:37:44.040 --> 0:37:48.720 especially when that fee laden fund is underperforming those broader markets, 0:37:48.760 --> 0:37:50.680 super cheap index funds that that you and I love. 0:37:50.719 --> 0:37:53.719 It's quite literally kicking you while you're down. Yes, yes 0:37:53.760 --> 0:37:56.920 it is. And so let's say you are invested in 0:37:56.960 --> 0:38:01.040 a way that aligns with your own specific risk. Laurance, Well, 0:38:01.120 --> 0:38:04.360 an important step to take when it comes to staying 0:38:04.360 --> 0:38:07.360 the course is to insulate yourself from the feeling of 0:38:07.400 --> 0:38:10.440 pain when the market is not doing so hot. Not 0:38:10.560 --> 0:38:14.279 by avoiding market participation, not by not investing, but might 0:38:14.400 --> 0:38:16.840 not looking at what's going on with your portfolio. That 0:38:17.080 --> 0:38:19.160 is a mistake I think people people make is that 0:38:19.160 --> 0:38:21.759 they're they pay too much attention. Because once you kind 0:38:21.760 --> 0:38:23.799 of have your strategy down, once you know your risk, 0:38:23.800 --> 0:38:27.279 Colorance and once you have started stocking money in every 0:38:27.280 --> 0:38:30.719 two weeks like clockwork on on the rag, well, who 0:38:30.760 --> 0:38:33.600 cares what's happening. You're gonna want to continue to ride 0:38:33.600 --> 0:38:36.080 it out through thick and through thin. And so what 0:38:36.160 --> 0:38:37.719 you might need to do is to one yet not 0:38:37.760 --> 0:38:41.520 look at your portfolio performance, especially especially in times of turbulence, 0:38:41.680 --> 0:38:44.840 and also avoid the headlines. So don't log into your 0:38:44.880 --> 0:38:47.400 account and kind of see that you're down six percent 0:38:47.440 --> 0:38:50.759 on the week or on the year. Right, those those 0:38:50.800 --> 0:38:54.960 inputs and and seeing them firsthand can trigger an emotional reaction, 0:38:55.320 --> 0:38:59.240 leading to potentially a knee jerk reaction on your part, selling, 0:38:59.280 --> 0:39:03.480 maybe at the wrong time, locking in losses. And yeah, 0:39:03.719 --> 0:39:07.200 this costs you money and it negatively impacts your financial future, 0:39:07.320 --> 0:39:10.400 especially if you're moving money that is in the market 0:39:10.719 --> 0:39:14.879 while it's down into cash. You're doing the exact opposite thing. 0:39:15.239 --> 0:39:17.200 We want to see you, uh, we want to see 0:39:17.200 --> 0:39:19.920 you actually funneling more of your cash from the sidelines 0:39:20.200 --> 0:39:23.960 into the market to take advantage of basically the sale 0:39:24.000 --> 0:39:26.839 that's happening in the market at the current moment. And so, 0:39:27.000 --> 0:39:28.680 but it's really important to kind of have a couple 0:39:28.719 --> 0:39:31.399 of mechanisms in place that prevents you from doing something 0:39:31.440 --> 0:39:35.000 that's emotionally charged, that could that could ultimately affect your 0:39:35.120 --> 0:39:38.319 future wealth by thousands or tens of thousands of dollars. Yeah, 0:39:38.360 --> 0:39:41.399 it's important to remember that these temporary market downturns, they're 0:39:41.400 --> 0:39:44.399 not costing you anything unless you sell. Once you sell, 0:39:44.560 --> 0:39:47.160 you cement those losses. Uh. And So in the game 0:39:47.200 --> 0:39:49.960 of investing, it's important to think and act for the 0:39:50.000 --> 0:39:53.760 long term. And you do that by reminding yourself why 0:39:53.840 --> 0:39:55.520 it is that you're investing in the first place. And 0:39:55.520 --> 0:39:57.680 and for most of us, it isn't to get filthy rich. 0:39:57.719 --> 0:40:00.200 That's not that's not our goal. It sounds nice, but 0:40:00.280 --> 0:40:02.640 it's not our goal, right. Not many of us need 0:40:03.040 --> 0:40:05.720 or want tens of millions of dollars in assets. Instead, 0:40:05.760 --> 0:40:08.120 we would rather get to a point of financial security 0:40:08.400 --> 0:40:10.759 and then hopefully to be able to chief financial independence 0:40:11.040 --> 0:40:13.400 in a reasonable amount of time. Uh. And So when 0:40:13.440 --> 0:40:16.480 you remember why it is that you're investing chasing these returns, 0:40:16.480 --> 0:40:19.560 it seems less important all of a sudden. It's why 0:40:19.560 --> 0:40:21.799 it's so important to keep your timeline in mind. Right, 0:40:21.840 --> 0:40:24.480 going back to like the running uh analogy, If you 0:40:24.520 --> 0:40:26.560 know it's it's difficult to know how fast you should 0:40:26.560 --> 0:40:28.160 be running if you don't know if you're running for 0:40:28.160 --> 0:40:30.960 a hundred meters or if you're running a tin k, right, 0:40:30.960 --> 0:40:32.879 and so that's going to have a massive impact on 0:40:33.160 --> 0:40:36.000 the pace at which you're expecting to run. And so 0:40:36.080 --> 0:40:38.400 the same thing is true when it comes to the 0:40:38.480 --> 0:40:41.600 rate at what you expect to see returns within your portfolio. Yeah, 0:40:41.600 --> 0:40:43.840 I like that, Matt. If you remember that you're investing 0:40:43.960 --> 0:40:47.680 for future retirement, that you're still thirty years away from 0:40:47.800 --> 0:40:52.399 the desire or the feeling you have like I need 0:40:52.440 --> 0:40:54.799 to double my money by investing in some sort of 0:40:54.840 --> 0:40:58.680 speculative asset within the next three to six months. Well 0:40:58.719 --> 0:41:00.239 that kind of goes away because you're like, that's not 0:41:00.280 --> 0:41:01.719 the game I'm playing, Like why am I? Why am 0:41:01.760 --> 0:41:03.600 I even trying for that? Really, all I want is 0:41:03.760 --> 0:41:06.520 financial independence twenty years down the road. And so you 0:41:06.520 --> 0:41:08.440 can kind of like chill Ox and let other people, 0:41:08.680 --> 0:41:11.560 you know, do their crazy gambling thing all that take 0:41:11.600 --> 0:41:13.680 part in all that speculation. You don't have to do 0:41:13.719 --> 0:41:16.719 it because you're not playing that game. And then ultimately, 0:41:16.760 --> 0:41:18.279 what we would say when it comes to the stock 0:41:18.320 --> 0:41:21.040 market is is there's no better alternative when you're looking 0:41:21.080 --> 0:41:23.839 to grow wealth over the long haul. Again, if you're 0:41:23.840 --> 0:41:25.920 in the wealth building phase of your life, the stock 0:41:25.960 --> 0:41:28.120 market is where you're gonna want to be stashing dough. 0:41:28.560 --> 0:41:32.120 Despite the volatility and the lackluster future predictions. You know, 0:41:32.160 --> 0:41:34.560 if you haven't noticed, even with recent upticks in what 0:41:34.640 --> 0:41:38.640 savings accounts are paying rates on money or stashing away 0:41:38.920 --> 0:41:41.359 with your bank, they still suck. And that doesn't mean 0:41:41.400 --> 0:41:43.839 that you shouldn't be saving. You should, Like we're still 0:41:44.040 --> 0:41:46.680 fans of people having liquid cash, like we talked about 0:41:46.680 --> 0:41:49.399 earlier in the episode. It just means that you need 0:41:49.480 --> 0:41:52.200 market exposure to grow your nest egg because if you're 0:41:52.239 --> 0:41:55.600 just saving, you're not going to see your returns compound 0:41:55.600 --> 0:41:57.960 in any meaningful way. And so yeah, while the next 0:41:58.000 --> 0:42:00.719 few months and potentially even the next few years might 0:42:00.760 --> 0:42:05.080 see smaller, insignificant returns, it's still smart to bet on 0:42:05.160 --> 0:42:09.400 American ingenuity and to invest your money in our collective future. 0:42:09.440 --> 0:42:11.840 I would say, in order to grow your wealth for 0:42:11.840 --> 0:42:15.319 for your future. Really, when you're looking at alternatives, there 0:42:15.320 --> 0:42:19.600 aren't many that rival the wealth building potential of the 0:42:19.680 --> 0:42:21.680 U stock market. That's right, man, That's what we're putting 0:42:21.680 --> 0:42:24.320 our money in the stock markets as well as into 0:42:24.360 --> 0:42:30.680 the coffers of wonderful craft breweries, including those of Flying Machine. 0:42:31.080 --> 0:42:33.720 This is Escape from Lagger Mountain. This is a dry 0:42:33.840 --> 0:42:36.600 hopped rice logger with a couple of hops here that 0:42:36.640 --> 0:42:39.719 they're calling out. And I noticed here too that this 0:42:39.760 --> 0:42:42.040 is a beer out of Wilmington's. There are a lot 0:42:42.040 --> 0:42:45.280 of great breweries in Wilmington in North Carolina in general, 0:42:45.320 --> 0:42:48.319 but I mean specifically Wilmington. They must have really good 0:42:48.320 --> 0:42:50.960 beer laws up there in the north in North Carolina, 0:42:51.000 --> 0:42:53.840 and it's a incentivize all of this great brewing. But 0:42:54.000 --> 0:42:56.440 what ye what your thoughts on this specific beer? Okay, 0:42:56.560 --> 0:42:59.080 I will say I haven't had many rice loggers. I 0:42:59.080 --> 0:43:01.760 haven't either, and I thought it was really tasty it 0:43:01.800 --> 0:43:04.200 Maybe I should have more rice loggers because this one 0:43:04.239 --> 0:43:06.719 was especially this summer year. It was nice and light, 0:43:06.760 --> 0:43:09.160 but it also had those refreshing hot vibes like you 0:43:09.200 --> 0:43:11.759 could tell the dry hops gave like nice hop a 0:43:11.840 --> 0:43:16.000 roma and good hot flavor without being overpowering. And so 0:43:16.200 --> 0:43:17.840 this was this was a great beer. I was a 0:43:17.840 --> 0:43:20.040 big fan. Yeah. So from what I understand when it 0:43:20.080 --> 0:43:22.719 comes to beers that are brewed with rice it's it 0:43:22.800 --> 0:43:25.640 works as like a clarifying agent, and so it literally 0:43:25.640 --> 0:43:28.640 makes it taste cleaner, like cleaner and fresher, which is 0:43:28.680 --> 0:43:31.560 great when you're enjoying a nice cold logger like this, 0:43:31.640 --> 0:43:33.759 but it also literally makes it clearer when you're looking 0:43:33.800 --> 0:43:36.040 at it, and so it tends to pour a bit 0:43:36.080 --> 0:43:38.759 clearer as a you know, compared to like a hazy 0:43:38.840 --> 0:43:42.080 pale ale or something like that. But uh, the Flying 0:43:42.120 --> 0:43:43.760 Machine and the fact that they have the skull in here, 0:43:43.840 --> 0:43:45.600 this reminds me a lot of Is it parish that 0:43:45.640 --> 0:43:48.200 has the like the ghost in the machine? I don't know. 0:43:48.239 --> 0:43:50.239 There's a lot across the New Orleans Brewery right, there's 0:43:50.280 --> 0:43:53.839 also a great brewery. But we definitely enjoyed this one 0:43:53.920 --> 0:43:57.120 again from Flying Machine out of Wilmington, North Carolina. And 0:43:57.200 --> 0:43:58.680 so if you're able to pick one of these up 0:43:58.719 --> 0:44:01.799 wherever it is that you live, highly recommended, especially as 0:44:01.800 --> 0:44:04.840 an alternative to those macro loggers out there that you 0:44:04.880 --> 0:44:07.120 can buy. Yeah, this is one of those well crafted 0:44:07.160 --> 0:44:10.360 loggers there, the macro ones. It's amazing how big of 0:44:10.360 --> 0:44:13.520 a difference there are between a lot of the new 0:44:13.600 --> 0:44:16.239 craft loggers that are being made. This one has a 0:44:16.239 --> 0:44:19.920 ton of different flavor profile action going on. It's delicious 0:44:20.160 --> 0:44:22.600 and it's clean, like you said, and versus like the 0:44:22.680 --> 0:44:25.800 muddled just kind of like not not so great flavors. 0:44:26.040 --> 0:44:28.400 Stinky logger yea, yeah, of the stinky ones that like 0:44:28.680 --> 0:44:32.520 you smell like your uncle, you know, so you know, 0:44:32.360 --> 0:44:35.239 you know whatich uncle we're talking about. Everyone's got one. 0:44:35.760 --> 0:44:37.560 And plus the label on this beer is as really 0:44:37.560 --> 0:44:39.320 beautiful as well. You can find a picture of it 0:44:39.400 --> 0:44:40.960 up on our website at how the Money dot com, 0:44:41.000 --> 0:44:44.040 along with any resources that we may have mentioned during 0:44:44.080 --> 0:44:47.040 this episode. Right, and so if you if you haven't 0:44:47.040 --> 0:44:48.640 signed up for the how the Money newsletter, by the way, 0:44:48.640 --> 0:44:50.440 you totally should go at how the Money dot com 0:44:50.560 --> 0:44:53.640 slash newsletter. We are sending it out for free once 0:44:53.640 --> 0:44:56.960 a week into your inbox every single Tuesday morning. You'll 0:44:57.000 --> 0:44:59.120 get some of the best financial nuggets that we have 0:44:59.200 --> 0:45:02.040 to offer in your inbox. But Matt, that's going to 0:45:02.120 --> 0:45:04.920 do it for this episode. Until next time. Best Friends Out, 0:45:04.960 --> 0:45:06.080 Best Friends Out.